Jobs report posts gains, stock market tumbles
Wall Street capped its worst week in two years with the loss of more than 600 points alone Friday.
It was a devilish day for many investors, with the Dow Jones industrial average closing down 666 points. It marked the largest single day percentage freefall since UK voters elected to exit the European Union.
By the numbers, it's the sharpest decline since the 2008 financial crisis. But the drop comes after months of record-breaking gains and a better-than-expected jobs report.
Mitch Goldberg, president of the Melville-based ClientFirst Strategy investment firm, says it may have to do with interest rates.
"We can talk about the politics, we talk about the memo, but the real deal is the interest rate scenario," he says. "Not so much the amount rates have gone up but the speed they have gone up."
Major companies like ExxonMobil and Google's parent company Alphabet also suffered after weaker than expected earnings reports. And there's always the simplistic idea of what goes up, must come down. Goldberg says it's true: Friday's fall could be indicative of a market correction of sorts, but he says it's not time to panic. Instead, it's an opportunity to reassess your investment strategy.
"If you are someone who is 50 and under, and I am, I don't think you need to do much," he says. "In fact, a down market is your friend, because you are still contributing to a 401(k) plan. You are still an accumulator in life. It's really when you get mid-50s and up is when you start to worry. How close am I to retirement? If I take a big hit now, do I have to the risk tolerance to stay invested as I am now, and make it back?"
Market analysts say that despite the fall, the economy remains strong.